by There is bad news for the investors of the GBP/USD pair today. This is because the pair has lost its momentum as the value of the USD is growing stronger.
GBP Loses Ground against the USD
The positive data coming from the US has a huge role to play in uplifting the USD’s value against the GBP. However, it is the recent GDP data from the UK that has put it in a bad spot.
The GDP data shared by England was not what the economists and analysts had expected. The figure was lower than the estimations made by the economists.
The trading price of the British pound is moving in the negative zone. The situation for the GBP ended up getting worse today.
UK Reports Contracting GDP
It was on Thursday when the GDP results were posted by the government of the United Kingdom. Unfortunately, the country was unable to meet the GDP target that was set by the economists.
The data showed that the GDP of the United Kingdom had contracted. This ended up pulling the trading price of the GBP. In the European session, the trading value of the pair ended up losing 0.61% dip.
This ended up bringing the trading price of the GBP versus the USD to 1.2126 on Friday. This is not a good sign for the United Kingdom and it can lower the value of the GBP versus the USD even further.
The British Economy Declined in Second-Quarter
Prior to the Friday downtrend, the British Pound had performed really well. The gains of the British Pound were very dazzling and attractive to the investment community.
It was expected that the value of the USD would continue falling while the value of the GBP may continue rising. However, things worked exactly the opposite of expectations.
The USD Gained Momentum
The devaluation of the GBP versus the USD cannot be attributed to the low GDP results for the last month. It can also be attributed to the rising price of the USD versus the GBP as well as other currencies.
The USD has been gaining strength and momentum versus other currencies because of the weaker-than-expected inflation rates expected in the United States.
As the Feds reported promising results, which meant that people could have a breather due to weakening inflation, investors have started investing in the USD.
This has helped the USD gain power and momentum against the GBP, pushing its value upward.
Support Level for GBP/USD
If the pair keeps falling, it would find its support level at 1.2123. If the value of the pair keeps losing its value, then the next support level it may hit would be 1.2061.
